Should You Terminate Before of After the Holidays – That is the Question

At this time of year we often hear that it is “better to give than receive”. Human Resources professionals are well aware of the fact that the holidays present unique challenges when terminating employees.

I was listening to a radio show recently and the host was inquiring about whether it was “better” to terminate an employee before or after the holidays. As might be expected, callers differed in their opinions.

The reality is that there is no right answer to this question. That said, there are things that can and should be considered before carrying out the termination.

There may be a host of reasons why “now” (pre-holiday) is the right time, and waiting is not a feasible option. For example:

there may be business considerations that ultimately determine the timing. While it might seem “scrooge-like” to put these business matters (often financially or tax driven) ahead of human considerations, the reality is that sometimes there is no practical alternative. However, as we all know, when it comes to employees, it is absolutely not just business, and human feelings and emotions must be factored into every decision.

the employee may have engaged in serious misconduct amounting to just cause, and, after engaging in the contextual analysis in McKinley v. BC Tel [2001] 2 SCR 161 (CanLII), the employer determines that termination is the appropriate penalty. Waiting to terminate in these circumstances might be seen as either condoning the misconduct or undermining its seriousness.

Leaving aside those somewhat unique cases, employers need to be aware that the time of year at which a termination occurs has been taken into account by courts as a factor when determining the period of reasonable notice at common law.

Such was the case in Fraser v Canerector Inc., 2015 ONSC 2138 (CanLII). The employer terminated Mr. Fraser without just cause in June 2014. Mr. Fraser was 46-years old and held a senior position at Canerector. He had been employed for 34 months at the time of his termination and alleged that he had been induced to leave secure employment by Canerector such that he was entitled to a longer period of reasonable notice than might otherwise be the case. He found work in the industry 10 weeks after his termination albeit at slightly less base salary.

The Court decided that Mr. Fraser was entitled to 4.5 months reasonable notice of termination in the circumstances, less amounts previously paid by the employer to Mr. Fraser in respect of reasonable notice period. And that brings me to what I really want to discuss here. The Court in Fraser felt that the “time of year” when the termination was carried out was a relevant factor in deciding on the period of reasonable notice. Here’s what the judge had to say:

I find that for a man of Mr. Fraser’s age and level of responsibility but relatively short years of service, I must also account for the time of year when his employment was terminated in assessing reasonable notice. Mr. Fraser’s employment was terminated in June and it was quite foreseeable that hiring decisions at his level might have needed to be delayed somewhat due to the summer months in order to account for vacation schedules of key decision-makers. While his term of service might normally suggest a relatively shorter period of notice, timing plays a bigger role where notice is short. While timing in fact was no impediment in this case (Mr. Fraser having found new employment by August), that is a conclusion enabled by hindsight. [Emphasis added]

The Court noted that:

Absent my consideration of the potential negative impact of the summer break on Mr. Fraser’s job prospects, I should have awarded a somewhat shorter period of notice (three months).

In other words, the time of year at which the termination took place increased the period of reasonable notice by 1.5 months. The case does not lay out any evidence that supports this statement. The Court, as it has in many cases of late, seems to take “judicial notice” of the “fact” that it is harder to find work in the summer. The same argument can be made for terminations that occur around Christmas. Indeed there is case law exactly on this point.

Employers will sometimes argue in a wrongful dismissal case that the employee failed to mitigate by making reasonable efforts to secure alternate employment. Terminations around Christmas time have resulted in different considerations. In Christianson v. North Hill News Inc. 1992 CanLII 6095 (AB QB) the Trial Judge, in discussing the issue of mitigation in a wrongful dismissal case, observed:

I think I can take judicial notice of the fact that job hunting at Christmas time is probably not very productive.

On the facts of the case, the judge found that the employee had failed to mitigate. The plaintiff appealed to the Court of Appeal and the Court overturned the trial judgment on the issue of failure to mitigate (see Christianson v. North Hill News Inc., 1993 ABCA 232 (CanLII)).

This individual was fired without notice or warning, while he thought he had guaranteed employment. He was in fact called back from a road trip, to attend in Calgary to receive his dismissal. He was immediately asked to surrender his company vehicle. Under these circumstances it is not unreasonable that an individual such as the plaintiff had to regroup and heal for two months. The timing of the year is also significant, it was the start of the Christmas festive season in which a considerable amount of celebratory thought has a tendency to distract people from business issues. For me to claw back $2,400 for the failure to mitigate in not taking a grocery boy shelf stocking job in November and December of 2005 would create a “Scrooge like” mitigation environment which does not accord either with the law or logic. [Emphasis added]

Although some delay in commencing a job search is reasonable, as the employee adjusts to their new circumstances, where the termination occurs prior to the “festive season” employees can be excused from looking for work during that period.

In Chawrun v. Bell Mobility Inc., 2013 BCSC 102 (CanLII), the plaintiff, a sales account executive, ceased his job search in January 2010, two months after his dismissal in November 2009. During that two month period, the plaintiff made detailed efforts to obtain a job and kept a handwritten log, concentrating on employer’s websites, and getting interviews.

After his search, the plaintiff learned that he qualified for retraining funds and was accepted into a retraining program for the “Network Administration and Security Professional Program”. He then “stopped making serious efforts to find a job” and “did not apply for any new jobs after January 24, 2010”.

The Court held that “there were several prospective employers and/or head-hunting agencies looking for candidates to fill positions who were sufficiently interested in Mr. Chawrun and his existing qualifications to interview him”. As such, the Court held that the employer had satisfied its onus to establish a failure to reasonably mitigate damages as of the date the plaintiff chose to retrain, since there were comparable opportunities available to him. In saying this, the Court commented:

I believe he would have understood that employers were unlikely to be conducting interviews during the Christmas holiday period and the log Mr. Chawrun created to record his attempts to find employment indicates no activity on his part between December 21 and January 4 or 5.

In other words, the Court found that the one-month period around the Christmas holidays was not a period when the plaintiff could have reasonably obtained employment. As such, the Court adjusted the notice period.

Employers need to be aware of this argument when deciding whether to terminate the employee prior to the holidays when the period of reasonable notice will extend over the holiday season.

Employers are somewhat in a corner, and “damned if they do and damned if they don’t”. I have been faced with letters from plaintiff counsel chastising my client and seeking increased damages whether they terminate before or after the holidays.

So what do you do?

Obviously, terminations are never easy (and they shouldn’t be). They impact on people and their families and should be carried out, in all cases, sensitively, professionally and with due regard to the fact that these decisions have broad implications. Increasingly, courts are looking at the optics of the termination in deciding upon the terminated employees’ loss or damages.

There is no right answer to the timing question, however it is critical that the timing issue be considered at all times, but more specifically at this time of year. At least two questions must be examined:

Can the termination be delayed until after the holidays (for example, where there are no business considerations or legal risks (e.g. condonation) associated with delaying the decision)?

If so, should the decision be delayed?

In the end, where the decision can be delayed into the New Year, it may be preferable, from an optics perspective, to delay the implementation of the termination until January. At least then the employer can say “we considered the timing, did not want to impact the employee’s holiday, and instead continued to pay the employee, when this wasn’t necessarily in our business interests. We thought we were doing the right thing for the employee, and if we’re to be criticized, it’s for being too considerate of the situation…”. Furthermore, Courts (and employees) will likely not be able to argue that the period of common law reasonable notice should be increased because of the timing of the termination and the assumed lengthening of the employees’ job search.

Again, there are no hard and fast rules here, and no easy or right answers. There is nothing that prevents the employer from terminating an employee prior to the holiday season. The point is not to come up with a silver bullet, but to raise the issue and encourage thoughtful contemplation of the timing before rushing in one direction or another.